Dane DeValcourt

My last post about Cisco’s EnergyWise announcement this week got me thinking about something.  Started to ponder on the economy and wondered if maybe the bad economy is really not such a bad thing after all.

For years I have been disgusted by the amount of spending by both people and businesses.  So many people and businesses living beyond their means.  Main reason is credit of course.  But also this whole disposable, fast paced society we live in.

Credit has given people and businesses a false sense of personal wealth.  It has inflated everything, more money people think they have the more they spend on things they can’t really afford.  The more spending the better ‘business’ is, which in turn gives businesses a sense of doing better then they are.  Businesses living on credit as well. And thus exaggerating the whole mess even more.  And of course we can’t forget about the stock market.

Credit is not all to blame but I think it even plays a part in creating or at least influencing the society we have created.  Everything is disposable, and why not since we have credit to just buy something new.  Very few save anything these days.  I also think its not too far fetch to say that it has also influenced the fast food lifestyle many of us (including myself) have adopted.  We convince ourselves its cheaper to just eat out.  If we go shopping that takes time, time is money, anything we buy to cook at home is going to be too much for one person and in many cases too much for two and even three people.  By the time you buy everything you need and the when you count the time it takes to cook, you end up convincing yourself its cheaper to just eat out.  When you do manage to cook you have lots of leftovers usually, and some of us have good intentions to turn these leftovers into tomorrows lunch at work.  However good the intentions though we don’t usually follow through.  Either we forget them at home or maybe we take them but then someone asks you to go out to eat at the office or maybe we just get so busy and wrapped up in things at the office we forget about them.

When I think back to when I was a child watching my parents manage a family of four I recall how rare it was to ever go out to eat.  I remember how smart they were in splitting up food prior to cooking it and freezing things, and yet cooking enough to have leftovers because they rarely would eat out for lunch at work.  Heck they even reused ziploc bags!  Drove me nuts as a kid having to wash out and dry ziploc bags.  Were we poor or broke?  Nope but when you consider how they came up, particularly my Dad and you realize why they were efficient or cheap or what ever you want to call it.

Anyway, so my thoughts are maybe this country needs another depression.  Maybe a bad economy will cause people to re-evaluate themselves, their spending and so on.  We are already seeing some of this if you take a moment to look around.  People aren’t eating out so much, thinking about the “what if” and starting to save.  People are cutting back on things and being more fiscally conscious and conservative.

You really see this when you look at what businesses are doing.  I have complained before how I hate how many businesses have no incentive to be efficient.  An example is how managers are often judged not by actual work or being efficient but actually the reverse.  See many managers are judged by how many employees they have, headcount.  The more headcount the bigger the manager or department.  The bigger the department the bigger the budget.  The bigger the budget the more pull you have.  And when it comes to budgets there is no incentive to save or be fiscally conservative.  If you don’t use up all your budget then you run the risk of having it cut next year since you obviously didn’t need that much.  So instead you create a situation where there is no incentive for managers to run an efficient department.  In fact the opposite holds true.  Managers want to go over budget if possible as that would imply they need a bigger budget, and well bigger budget the bigger the manager right?

Forgive me, I know I have a tendency to go all over the place when I write things.  Just hang in there.

Ok so this bad economy is causing companies to re-evaluate the way they do things.  All of a sudden being efficient is encouraged finally.  Coming in under budget is now a positive.  Efficiency is now a good thing.

The bad economy is also helping to push the whole going green cause since going green can typically lead to lower expenses.

So as you can see I am starting to think maybe we need this.  I think maybe we got a little too big for our britches in ways.  Comfortable with spending and not being held accountable for things.  Wasting like there is no tomorrow.  Why because things were so good, everyone thinks they are in control of their destiny and life and finances when in fact we have very little control.  Anything can happen to anyone and we can loose it all in heartbeat.

You don’t believe me?  Look at some of the people in the whole Madoff scandal, some of these people were on top of the world, thought they were secure financially for life and yet almost overnight it was all gone.

So what does all this tell us?  What will you learn from all of this?  Many won’t learn anything until they are directly affected.  Some may start to realize what I have now just by looking around them and with a little introspection.

I am hopeful that eventually this whole thing will only make us stronger as individuals, as businesses and as a nation.  Realize just how fragile everything is and how closely interconnected we all are even in the smallest ways.

Its obvious to me there is a reason I am still a simple worker bee when it comes to the business world.  I simply can’t comprehend some of the decisions that are made by many businesses and their leaders.

For instance, how does a company in these economic times do layoffs one week and the next take all the employees to Disney Land for a holiday retreat?  Mahalo is only one example, I see this sort of thing happen all over though.  Some take it even further than that and some less.  But regardless how do you operate a business and in one breath talk about how you need to implement cost cutting initiatives and in the next waste money on such trivial things?

Also baffled why it takes an ‘economic’ crisis before they decide  to cut back on expenses and try to be more efficient.  Shouldn’t you operate a business where you always try to be as efficient as possible?

For instance most businesses tend to reward managers not for cost cutting and efficiency but quite the opposite in fact.  Many managers are rewarded based on how many employees they manage.  So of course most managers want more employees since they are rewarded based on headcount so there is no need to be efficient or have efficient employees. 

Then of course you have the way companies use ‘budgets’ to manage money.  What a joke that is.  Again managers are typically judged by the size of their budget.  The bigger the budget the bigger the manager.  So of course managers want budgets to be as big as possible so they have no reason to be efficient in how they spend money.  In fact many want to go over budget because that must mean they need a bigger budget.  If a manager is prudient and runs an efficient department and is able to save money and come in under budget then they run the risk of having their budget cut next year. 

It seems to me you would want to reward the ones who run a tight ship if you will and not the opposite way around?  But as I said I guess thats why I am but lowly little worker bee and not one to buy into this madness.